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OMI sues city for $2M

Claims include contract breach, Open Meetings Act violations

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POSTED: December 21, 2013 11:12 a.m.

The public works giant Operations Management International Inc. is suing Richmond Hill for $2 million, alleging the city breached its contract when deciding to end its relationship with OMI in the middle of a five-year agreement.
The company also claims the city violated public bidding laws and Georgia’s Open Meetings Act.
OMI, which has run public works in Richmond Hill since 2000, also sought a restraining order to keep the city from ending its contract with OMI on Dec.31, but that effort apparently failed.
Richmond Hill Mayor Harold Fowler said Friday the city has done nothing wrong.
“What we did was legal,” he said. “We’ll let it play out in the courts.”
He referred other questions to Richmond Hill city attorney Ray Smith, who could not be reached by press time.
Documents filed Dec. 4 in Bryan County Superior Court show OMI claims the city’s decision will cost the public works operator more than $2 million and that it will have to soon relocate or terminate the 24 members of its Richmond Hill workforce.
OMI said in the lawsuit the city’s decision has harmed its reputation. It also called the city “stubbornly litigious.”

End of the relationship
The allegations stem from the city’s Oct. 15 vote to switch from OMI to Braddy Enterprises Public Works Division LLC on an interim basis.
It was said to be part of a plan to eventually bring the city’s utilities management back “in house” as it builds a new $24 million wastewater treatment plant.
In October, City Manager Chris Lovell said the switch would save taxpayers more than $300,000 in 2014, a figure based on paying Braddy Enterprises about $2.6 million annually and a contract with OMI of $3 million.
The company disputed the contract amount at the city’s Nov. 19 council meeting when Gary Wood, a regional vice president, addressed the council and said OMI’s current agreement with the city was worth $2.74 million in 2013, not the reported $3 million.
He then offered to reduce it to $2.6 million in 2014.
After Wood spoke, Fowler said he and Lovell met three times with OMI managers and twice asked them if “this was the best rate the city could get for the contract,” and was told it was.
Fowler told Wood he thought that effort was an attempt to negotiate.
Woods said local managers didn’t have the authority to negotiate rates “without due process,” and apologized for the misunderstanding, but Fowler thanked him for his comments and moved ahead with the meeting.
OMI, which runs utilities in more than 200 communities in the U.S., claims the city’s actions come just two years into a five-year agreement negotiated in November 2011 between it and Richmond Hill.
It also claims its $2.6 million offer is less than the $2.611 contract with Braddy Enterprises.

Read more in the Dec. 21 edition of the News.

 

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